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Demat of Physical Share Certificate

Dematerialization, or Demat of Physical Share Certificate, is the process of converting physical share certificates into electronic form. This means that the shares are no longer held in paper form, but rather as digital records. Demat is required by the Securities and Exchange Board of India (SEBI) for all share trading through recognized stock exchanges. This is because demat makes it easier to trade shares, as it eliminates the need to physically transport share certificates. It also makes it more secure, as shares are held in a digital vault that is protected by multiple layers of security.

Benefits of Demat of Physical Share Certificate

Here are some of the benefits of demat:

Ease of trading: Demat makes it easier to trade shares, as you no longer need to physically transport share certificates. You can simply trade shares online or through a broker.

Security: Demat is more secure than holding physical share certificates, as your shares are held in a digital vault that is protected by multiple layers of security.

Convenience: Demat is more convenient than holding physical share certificates, as you can access your shares from anywhere with an internet connection.If you currently hold physical share certificates, we can help you demat them in quick and easy way, and your shares will be dematerialized within a few days.

Dematerialization is the process of converting physical share certificates into electronic form. This is done for people who own shares in a company but do not have the physical certificates. Physical share certificates are becoming increasingly rare, as most people now buy and sell shares online. The only people who are likely to still have physical share certificates are senior citizens who bought their shares many years ago.

Here are some of the reasons why dematerialization is becoming more common:

  • It is more convenient. You can access your shares from anywhere with an internet connection.
  • It is more secure. Your shares are held in a digital vault that is protected by multiple layers of security.
  • It is more efficient. The process of trading shares is much faster and easier when they are in electronic form.
  • If you currently hold physical share certificates, we can help you demat them in quick and easy way, and your shares will be dematerialized within a few days.

Physical shares are liable to

  • Theft
  • Damage
  • Loss
  • Wear and Tear

Converting physical shares to electronic form eliminates the need to worry about losing or damaging the certificates. However, the process of doing so can be long and tedious. There are a number of clearances and procedures that need to be completed before the conversion can be finalized.

Here are some of the steps involved in the dematerialization process:

  • You must open a demat account with a depository participant (DP).
  • You must submit a dematerialization request form to your DP.
  • You must submit the original physical share certificates to your DP.
  • Your DP will verify the authenticity of the share certificates.
  • Your DP will send the share certificates to the relevant registrar and transfer agent (RTA).
  • The RTA will cancel the physical share certificates and create electronic records of your shares.
  • Your DP will update your demat account with the electronic records of your shares.
The entire process can take up to a few weeks to complete. However, once it is complete, you will no longer need to worry about losing or damaging your physical share certificates. Your shares will be held in electronic form and can be accessed and traded through your demat account.

Converting physical shares to digital form can eliminate all of these problems. However, the process of converting physical shares to digital form is long and tedious, as it requires various procedures and clearances to be completed.

Here are some of the reasons why the process of converting physical shares to digital form can be long and tedious:

There are a number of steps involved in the process. In order to convert physical shares to digital form, you must first open a demat account with a depository participant (DP). You must then submit a dematerialization request form to your DP, along with the original physical share certificates. Your DP will then verify the authenticity of the share certificates and send them to the relevant registrar and transfer agent (RTA). The RTA will cancel the physical share certificates and create electronic records of your shares. Finally, your DP will update your demat account with the electronic records of your shares.

  • The process can involve a lot of paperwork. In order to complete the dematerialization process, you will need to provide a lot of paperwork to your DP, including your identity proof, address proof, and PAN card. You may also need to provide a letter from your broker or bank stating that you own the physical share certificates.
  • The process can involve a lot of waiting time. Once you have submitted all of the required paperwork, you will need to wait for the dematerialization process to be completed. This process can take several weeks or even months.
Despite the long and tedious process, converting physical shares to digital form can offer a number of advantages, including:
  • Increased security: Your shares will be held in a digital vault that is protected by multiple layers of security.
  • Ease of trading: You can trade your shares more easily, as you no longer need to physically transport the share certificates.
If you are considering converting your physical shares to digital form, be sure to weigh the advantages and disadvantages carefully. the process long and tedious process to convert your physical shares but dont worry, We share clainmers are here to help you. contact us

Convert Physical Shares to Demat

Any individual or entity can Convert Physical Shares to Demat that holds physical share certificates can convert them to dematerialized (Demat) form. This process is commonly known as “dematerialization.” Here's a breakdown of who can convert physical shares to Demat:

Individual Investors: Any individual who holds physical share certificates of a company can do Dematerialization of Shares. This is a common practice to streamline and modernize the ownership and trading of shares.

Companies and Corporations: Corporate entities that hold physical share certificates can also opt to dematerialize their shares. This is particularly relevant for companies that wish to simplify their shareholding structure or facilitate trading and Transfer of Shares.

Trusts and Institutions: Trusts, educational institutions, charitable organizations, and other non-individual entities to convert Demat of Physical Share Certificate to ensure efficient management and potential trading if required.

Joint Holders: In the case of joint holding of physical shares, all joint holders need to be part of the dematerialization process. The Demat account will reflect the joint ownership pattern and can be easily done Transmission of Shares.

Minor Shareholders: Shares held by minors can also be dematerialized. In such cases, the guardian or custodian of the minor's account will need to initiate and oversee the process.

Foreign Investors: Foreign investors who hold physical shares in Indian companies can also convert them to Demat form. This can simplify the process of trading and managing investments for international investors.

How to Dematerialize Shares?

Here are the steps on How to Dematerialize Shares:

Open a Demat Account: To start, you need a Demat account with a registered Depository Participant (DP). Choose a reliable DP and complete the account opening process.

Submit Dematerialization Request: Obtain a Dematerialization Request Form (DRF) from your DP or download it from their website. Fill in details like company name, ISIN, certificate numbers, and quantity of shares.

Attach Share Certificates: Attach the physical share certificates you want to dematerialize along with the filled DRF. Ensure they are endorsed with “Surrendered for Dematerialization” and signed by all shareholders.

Submit to DP: Submit the DRF and physical certificates to your DP. They will verify the details and forward the request to the relevant authorities.

Share Verification: The share registrar will verify the details with the company's records. This process usually takes a few weeks.

Electronic Credits: Once verified, the equivalent electronic shares will be credited to your Demat account. You will receive a statement confirming the dematerialization.

Physical Share Cancellation: After successful dematerialization, the physical share certificates will be defaced to prevent any misuse. They won't be valid for trading anymore.

Monitor Demat Account: Regularly monitor your Demat account to ensure the credited shares are accurate.

Difference Between Dematerialization and Re-materialization

While dematerialization refers to the process to Convert Physical Shares to Demat, rematerialization refers to the process of converting electronic shares back to physical certificates. You can choose to rematerialize your Unpaid Dividends / shares at any time, which takes 30 days. Rematerialized shares, on the other hand, are illiquid because they cannot be traded. It is critical to understand the distinction between dematerialization and rematerialization when learning How to Convert Physical Shares to Demat online.

  • Dematerialization of Shares has distinct ISINs, whereas rematerialized shares have unique numbers.
  • Dematerialized transactions are conducted electronically, whereas re-materialized shares are traded in person. According to the most recent SEBI guidelines, rematerialized shares cannot be traded.
  • Depositories keep track of dematerialized shares, while companies keep track of rematerialized shares.
  • Because electronic shares are kept in secure depositories, investors must pay maintenance fees ranging from Rs. 500 to Rs. 1000 per year. Individual investors keep rematerialized shares with no maintenance fees.
  • The most significant distinction between dematerialization and re-materialization is the security of the securities. The risk of theft is lower in dematerialized shares, whereas physical certificates are easier to forge/steal.

    • Documents Required For Dematerialization

    By physically holding the share certificates, you become a part-owner of the company that issued the shares in the first place. However, converting Demat of Physical Share Certificate necessitates the submission of certain documents to open a Demat account and then file a request to dematerialize share certificates. The following documents are required for Converting Physical Shares into Electronic Form in India:

  • Identity proof with a photo, such as your Aadhaar card, PAN card, voter ID card, driving license, and so on are required for Process of Converting Physical Shares into Demat.
  • Provide proof of residency, such as registered lease agreements, driver's licenses, passports, landline phone bills, electricity bills, apartment maintenance bills (if applicable), copies of insurance, gas bills, and so on.
  • Your bank's passbook or account statement (no more than three months old) will serve as proof of bank account.
  • The original copy of your physical share certificates. The share certificates must be in good condition and clearly visible.
  • Dematerialization Request Form duly completed. You must ensure that you use separate forms for different companies' shares. For example, if you own 5 shares of XYZ and 5 shares of PQR, two separate forms will be filled out for each company.
  • Each paper share in the physical share certificates must be defaced with the words 'Surrendered for Dematerialization'. Remember to obtain an acknowledgment slip for the shares you have surrendered.

    • In order to know the complete process about How to Convert Share Certificate to Demat, you can contact us. Additionally, at share claimers, we also give assistance for the Transmission of Shares and other share-related issue.

    FAQs

    1) What is dematerialization?

    The process of Dematerialization of Shares involves converting an investor's physical certificates into an equivalent number of securities in electronic form and crediting those securities to the BO's account with his DP.

    2) How can one convert physical holding into electronic holding, i.e., How to Dematerialize Shares?

    One must complete a DRF (Demat Request Form) that is provided with the DP and submit it along with the physical certificates that are to be dematerialized in order to dematerialize physical securities. For each ISIN, a separate DRF must be filled out.

    People often ask about How to Convert Physical Shares to Demat, here the following describes the entire process of Convert Physical Shares to Demat:

  • Deliver dematerialization certifications to your DP.
  • Through the system, DP notifies the Depository of the request.
  • The certificates are delivered by DP to the issuer company's registrar.
  • The dematerialization request from the depository is confirmed by the registrar.
  • Following the dematerialization of the certificates, the Registrar changes accounts and notifies the depository that the process is complete.
  • Depository informs the DP and adjusts its accounts.
  • The investor's demat account is updated by DP.

    • 3) What is an ISIN?

    A security is assigned a 12-digit alphanumeric identifying number called an ISIN (International Securities identifying Number), for example, INE383C01018. differing ISIN's will be assigned to equities issued by the same issuer that is fully paid up, partially paid up, or that has differing voting or dividend rights.

    4) How to Convert Share Certificate to Demat with Us?

    A)Scenario 1:

    If you already have a Demat of Physical Share Certificate, you can contact your depository participant (bank or broker), complete the DRF form that is provided by the DP, affix your actual share certificates to it, and then send it to the DP.

    B)Scenario 2:

    If you don't already have one, you can open one at any Depository Participant (Bank/Broker) of your choice for Transfer of Shares. You can also look for the depository participant service centers in your area by visiting our website.

    5) How much time is required for Dematerialization of shares once submitted?

    The SEBI standards state that the Process of Converting Physical Shares into Demat should take about 21 days to complete; however, it may take longer for some companies. With your DP, you can determine the status of Converting Physical Shares into Electronic Form.

    6) What will happen if I don’t demat my physical shares?

    After April 1, 2019, you won't be allowed to sell or Transmission of Shares in this situation. Before you may sell or transfer shares, you must wait for their demat. However, if you choose to, you may keep holding your shares in tangible form.